A few years ago Crossrail Ltd commissioned a study into the regeneration benefits of the scheme. Consultants estimated that Crossrail could add £5.5 billion in value to residential and commercial real estate between 2012 and 2021. In May 2013 Andrew Oxlade (writing for the Daily Telegraph) reported that property prices within a ten minute walk of Crossrail Stations had already increased by 30%, and could rise by 40% over 5 years. Farringdon and Tottenham Court Road stations were singled out as particular hotspots.
The interest stimulated by Crossrail has coincided with a period of unprecedented investment in the London market by international property speculators. Many commentators see the escalation in property prices as unsustainable, and anticipate a crash in the near future. However, the Daily Telegraph analysis shows that there is a significant differential between property and land prices/values near to Crossrail stations when compared with areas of London that are not served by the scheme.
Transport experts have criticised Crossrail’s funding structure. They claim that taxpayers will benefit from only a fraction of the increased value of property along the route. Some experts say that more should have been done to ensure more of the commercial benefits for landowners would be passed onto taxpayers. Transport Network columnist Christian Wolmar said the ‘crude’ structure of the London levy system, which contributes to meeting Crossrail’s costs, should have been supplemented by additional council rates on properties near the line.
“In the UK we’ve never developed a sophisticated way of capturing that added value. If you’d charged an extra pound or two per square foot in rates from the outset you’d not have deterred any takers’” he told the Financial Times.
The Deputy Mayor for Transport, Isabel Dedring, has conceded that only a ‘fraction’ of the rise in property values created by Crossrail will be captured. She added that lessons had been learnt, and future transport projects will be designed in a ‘smarter way’.
These reports serve to remind transport planners and economists (and, indeed, their critics) that attributing the costs and benefits of transport investments is a highly complex business. This is particularly the case where the investment decisions precede long periods of detailed design and construction which may span economic cycles.